Knowing Your Customer: 3 Steps to Becoming KYC Compliant

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Know Your Customer (KYC) is a vital component in the compliance process and it is a fundamental requirement to get to know your customer better if you are providing financial services or products.

KYC has had its detractors because it is perceived to sometimes be a somewhat complex process with a lot of paperwork involved, but there are ways to become KYC compliant without getting buried in forms.

Here are some of the steps you can take toward achieving due diligence and getting to know your customer.

Use an identity verification service

You can quickly establish the identity of customers using a service such as Netverify and take advantage of advanced technology that includes robust features such as biometric facial recognition and helps minimize the prospect of fraud.

Using an identity verification service could be a considered a win-win situation when you consider that using an established facility will not only help you to achieve regulatory compliance but it can also give your customer more assurance regarding data safety and security.

If you are providing financial services to your customers, an ID verification service should help increase your transaction completion rates and help you to flag and account applications that could otherwise create KYC compliance issues.

Creating a bond of trust

Not everyone is honest when they are dealing with a financial institution and this means that you have to complete due diligence checks to ensure that you can trust a potential client.

Going through the due diligence process is also a key step in achieving KYC compliance for your business.

There are several levels of due diligence and the checks become more robust as an when the situation demands it.

Simplified due diligence is acceptable when the risk of money laundering is considered minimal and the account is low value. A basic check can be considered the default option as it involves obtaining all the information you need to be able to verify the identity of a customer.

You would be expected to carry out enhanced due diligence checks in a situation where you are dealing with a higher-risk customer or when you want to be able to mitigate risks.

It is often down to your business to decide which level of diligence you need to apply to satisfy KYC compliance requirements.

Updated information

Another important point to remember regarding KYC compliance is that checking your customer once upon application is not the end of the story.

It is considered vital to have an ongoing monitoring function at your disposal so that you are able to know your customer as their financial position evolves and changes.

Our personal risk profile can adjust as a result of different circumstances and that means that you need to be one ball with ongoing monitoring if you are going to maintain KYC compliance.

It is part and parcel of conducting financial transactions that you need to know your customer and the good news is that there are a number of useful tools and systems available that can help you tick all the right boxes with your customer due to diligence requirements.

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